Friday, 15 May 2009

Lucky Lord Myners

At a time when scores of MPs are exposed as corrupt and venal charlatans, it is hard to insist that a man should be fired simply because he is incompetent.

Today's Treasury committee report savaged Lord Myner's conduct during the RBS nationalization. On any other day, he would been forced to take the long walk. However, today, he can rest easy. There are other, far more serious offenders who refuse to resign in the face of outrageously inappropriate conduct.

We conclude that Lord Myners’ assertion that his precept to the RBS Board—that there should be no reward for failure—did not represent an adequate oversight of the remuneration of outgoing senior bank staff.

Instead, it would have been far better if Lord Myners had given a stronger, clearer direction of Government requirements for a bank in receipt of public funds and had assured himself by demanding to be kept informed of the detailed negotiations that were taking place. Secondly, we are not convinced that Lord Myners was right to take on trust RBS’s suggestion that there was no option but to treat Sir Fred as leaving at the employer’s request. It would, we believe, have been open to Lord Myners to insist that Sir Fred should have been dismissed.

Finally, we are not convinced that the Treasury was right to rely on the current RBS Board to handle these negotiations without direct Treasury involvement. The RBS Board had shown itself to be incompetent in the management of the bank, steering it towards catastrophe, and was also possibly dominated by Sir Fred; there were no grounds for trusting them with this operation.

We suspect that Lord Myners’ City background, and naiveté as to the public perception of these matters, may have led him to place too much trust in an RBS Board that he himself described to us as “distinguished”.